cn rail
CANADIAN PACIFIC RAILWAY LTD., $169.99, Toronto symbol CP, and CANADIAN NATIONAL RAILWAY CO., $61.98, Toronto symbol CNR, have had trouble shipping last year’s record grain harvest on the Prairies to Canada’s west coast due to bad winter weather. To help clear the backlog, Ottawa now plans to fine CP and CN if they fail to ship a minimum amount of grain per day. The railways already plan to increase shipments as the weather improves, so any fines should be small next to their earnings. CP Rail and CN Rail are still buys....
TIM HORTONS INC., $58.25, Toronto symbol THI, rose this week after it reported higher-than-expected quarterly earnings. It also raised its dividend and announced a new share buyback plan. The company operates 3,588 coffee-and-donut stores in Canada and 859 in the U.S. It also has 38 outlets in the Persian Gulf. In the three months ended December 29, 2013, Tim Hortons’ revenue rose 10.7%, to $898.5 million from $811.6 million a year earlier. That’s mainly because it renovated more outlets, which let it charge franchisees higher fees. Same-store sales rose 1.6% at its Canadian locations and 3.1% in the U.S....
CANADIAN NATIONAL RAILWAY CO. $60 (Toronto symbol CNR; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 836.0 million; Market cap: $50.2 billion; Priceto- sales ratio: 4.8; Dividend yield: 1.4%; TSINetwork Rating: Above Average; www.cn.ca) expects that its operating ratio crept up to around 63% in 2013 from 62.9% in 2012. (Operating ratio is calculated by dividing a company’s regular operating costs by its revenue. The lower the ratio, the better.)
CN continues to buy fuelefficient locomotives and run longer trains. These moves should cut its operating ratio to around 60% over the next three years.
CN is also benefiting from a lack of pipeline capacity, which is prompting oil producers to ship by rail. Higher demand for automotive equipment and building materials should also increase its shipping volumes. As a result, CN’s earnings should rise 13.2%, from a projected $3.10 a share in 2013 to $3.51 in 2014. The stock trades at a reasonable 17.1 times the 2014 estimate.
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CN continues to buy fuelefficient locomotives and run longer trains. These moves should cut its operating ratio to around 60% over the next three years.
CN is also benefiting from a lack of pipeline capacity, which is prompting oil producers to ship by rail. Higher demand for automotive equipment and building materials should also increase its shipping volumes. As a result, CN’s earnings should rise 13.2%, from a projected $3.10 a share in 2013 to $3.51 in 2014. The stock trades at a reasonable 17.1 times the 2014 estimate.
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BLACKBERRY LTD. $9.36 (Toronto symbol BB; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 524.6 million; Market cap: $4.9 billion; Price-to-sales ratio: 0.6; No dividends paid; TSINetwork Rating: Speculative; www.blackberry.com) has sold an additional $250 million worth of convertible debentures (all amounts except share price and market cap in U.S....
Canoe EIT Income Fund, $11.99, symbol EIT.UN on Toronto (Units outstanding: 89.9 million; Market cap: $1.1 billion; www.canoefinancial.com), changed its name from EnerVest Diversified Income Trust in November 2013. The stock symbol remained the same. Canoe EIT is a closed-end fund that invests in a portfolio of stocks that are mainly listed on the Toronto exchange, with a focus on dividend income. The fund trades at a 16.6% discount to its net asset value and has an MER of 1.45%. The fund’s top holdings are TD Bank, Bank of Nova Scotia, Royal Bank of Canada, CN Rail, Crescent Point Energy, Telus, Microsoft, Boeing, Encana and Wells Fargo. Canoe EIT has 33.8% of its assets in finance stocks and 25.1% in oil and gas firms....
In next week’s Successful Investor Hotline, we’ll reveal our #1 stock pick for 2014. Don’t miss this unique opportunity to profit. CGI GROUP INC., $34.37, Toronto symbol GIB.A, fell 2.5% on Friday after the U.S. government said it would use another company to fix the Healthcare.gov website, which lets Americans shop for health insurance plans under the Affordable Care Act (or Obamacare). GCI is the lead contractor for the website. Since the site began operating on October 1, 2013, visitors have had trouble logging on and evaluating the various health plans. As a result, fewer users than expected have signed up....
CANADIAN NATIONAL RAILWAY CO. $58 (Toronto symbol CNR; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 836.0 million; Market cap: $48.5 billion; Price-to-sales ratio: 4.6; Dividend yield: 1.5%; TSINetwork Rating: Above Average; www.cn.ca) operates Canada’s largest railway. Its 32,350- kilometre network stretches across the country and through the U.S. Midwest to the Gulf of Mexico.
Manufacturers are shipping more goods by rail, thanks to the improving North American economy. At the same time, a lack of pipeline capacity is prompting oil producers to ship more of their product by train.
As a result, CN’s earnings rose 9.0% in the three months ended September 30, 2013, to $724 million from $664 million a year earlier. Due to fewer shares outstanding, earnings per share gained 13.2%, to $0.86 from $0.76 (all per-share amounts adjusted for a 2-for-1 stock split in December 2013).
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Manufacturers are shipping more goods by rail, thanks to the improving North American economy. At the same time, a lack of pipeline capacity is prompting oil producers to ship more of their product by train.
As a result, CN’s earnings rose 9.0% in the three months ended September 30, 2013, to $724 million from $664 million a year earlier. Due to fewer shares outstanding, earnings per share gained 13.2%, to $0.86 from $0.76 (all per-share amounts adjusted for a 2-for-1 stock split in December 2013).
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CANADIAN NATIONAL RAILWAY CO. $58 (Toronto symbol CNR; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 836.0 million; Market cap: $48.5 billion; Price-to-sales ratio: 4.6; Dividend yield: 1.5%; TSINetwork Rating: Above Average; www.cn.ca) operates Canada’s largest railway....
ENBRIDGE INC., $43.71, Toronto symbol ENB, announced this week that U.S.-based Marathon Petroleum Corp. (New York symbol MPC) will invest in its proposed Sandpiper pipeline, which would pump oil from North Dakota’s Bakken shale formation to U.S. refineries. Under the deal, Marathon will cover $975 million (37.5%) of Sandpiper’s $2.6-billion cost. In exchange, Marathon will get a 27% stake in Enbridge’s North Dakota pipeline system. Enbridge’s share of Sandpiper’s cost is $1.625 billion. That’s equal to 1.5 times the $1.1 billion, or $1.33 a share, that it earned in the nine months ended September 30, 2013....
SNC-LAVALIN GROUP INC., $42.59, Toronto symbol SNC, fell 5% this week after it cut its 2013 earnings outlook, mainly due to one-time losses on certain fixed-priced engineering contracts it signed between 2010 and 2012. The nature of these deals, which include hospitals, roads and unspecified projects in North Africa, prevents SNC from passing along unexpected cost increases to its clients. The company also expects that a previously announced reorganization of its European operations will cost an extra $75 million. At the same time, weak prices for gold and other commodities have slowed construction of new mining projects. As a result, SNC will probably earn $10 million to $50 million in 2013. That’s a big drop from its earlier prediction of $220 million to $235 million....